No…You Actually Don’t Need A Delaware LLC.
If you’re an entrepreneur or a person looking to organize your business, I am sure you have heard the best place to register your LLC is Delaware. This assertation has almost become a myth as everyone seems to recommend it but no one seems to know why. I am writing here to de-mythify the notion that one should organize their business in Delaware as opposed to another state, most notably where a person is actually conducting their business.
Approximately 64% of Fortune 500 companies have chosen to incorporate in Delaware.1 Delaware is also the leading jurisdiction for out-of-state incorporations, where a corporation headquartered in one state chooses to incorporate in another state.2 The reason being that Delaware laws and courts provide stockholders with more rights and flexibility than any other state and litigation has proven this much, time and time again. Other states usually have strong anti-takeover statutes and related laws that halt stakeholder takeovers and limit the extent to which corporate managers must make the stockholder’s best interests. This is crucial when dealing with publicly traded companies because of the number of stakeholders and the operational relationship between officers & managers and stakeholders, specifically regarding decision making power and direction of the company.
